Wednesday, 27 October 2010

Leadership Effectiveness

Although the need for, and the significance of, leadership are well
known to business leaders, insofar as it can be argued that leadership is the quality
these actively seek the most, this feature seems to be so uncommon as to be usually
considered as a precious and rare asset. This could sway many management
practitioners and academics into opting for the idea that, although leadership
can in part be learned, the most relevant and valuable part of it is innate.

The specific, distinctive and genuine behaviour typical of a good leader
is actually exhibited and can be thus genuinely identified under some
particularly delicate or difficult circumstances. Leaders essentially show to have
what it takes to be recognised and considered as true, legitimate leaders by the
other individuals: during the unfolding of difficult situations, when prompted
to carry out particularly tricky and complex tasks (such as leading change) or under
unexpected circumstances when it is actually particularly hard, although not
completely impossible, for an individual acting as a good leader only thanks to
what this has learned in theory.

Under
all of these circumstances, “feigning” and “pretending” to be a different
person, with different traits and characteristics, would definitely turn to be a
sorely awkward exercise for any individual. It is very likely that the real
individual traits would thus emerge, revealing the real individual attitude and
unveiling that this is actually different from what this pretends to be and to
appear to be.

General Sun Tzu
(孫子) in the Art of War (兵法), which dates back to some centuries B.C., formulated some suggestive
and to some extent extreme definitions of leader (since the date in which the
manuscript was written is still the object of controversy, we will place, as
done by the eminent scholars who have studied his writing, Sun Tzu’s text in
the category of “Authorship Unsettled”).

According to what are nowadays considered Sun
Tzu’s estimates, the General defined a leader as the one in charge of creating
“moral influence”, that is, to induce in individuals what causes these “to be
in harmony with their leaders, so that they will accompany them in life and
unto death without fear of mortal peril.”

Without a doubt,
the attainment of such a difficult feat represented a truly ambitious challenge
at the time and could explain why finding a good leader represented such an incredibly
challenging feat. Albeit no organisation is nowadays asking a leader to be so remarkably
“morally influent”, for employers finding good leaders today does not seem to
be easier than it was for a general at that time.

Even more
interesting is the definition of leader provided by the ancient text
commentator Chang Yü (about whom not that much is actually known): “When one
treats people with benevolence justice, and righteousness, and reposes
confidence in them, the army will be united in mind and will be happy to serve
their leaders. The book of Changes says: In
happiness at overcoming difficulties, people forget the danger of death.”

Sun Tzu also claimed that qualities such as: wisdom,
sincerity, humanity, courage and strictness, qualities considered of paramount
importance also in present times, are absolutely necessary for effective leaders.
These qualities were later defined by the Tang writer on military subjects Li
Chuan as the five virtues of the general deserving to be referred to as “The
Respected One.”

Tu Mu (A.D. 803
– 52) added to the Sun Tzu definition of leaders that “If wise, a commander is
able to recognise changing circumstances and to act expediently. If sincere,
his men will have no doubt of the certainty of rewards and punishments. If
humane, he loves mankind, sympathises with others, and appreciates their
industry and toil.”

The Art of War
is a manuscript about war strategy containing several references to what Sun
Tzu at the time, and other commentators later, considered being the necessary
qualities and traits of a good, legitimate leader. Qualities and traits which
are at large still of extreme contemporary significance and relevance. It would
indeed seem that with the passing of the centuries little or nothing has
changed to this extent; the traits and qualities making for a good leader have in
fact invariably been considered basically the same.

These traits
and their significance have been identified and recognized centuries and
centuries ago; notwithstanding, finding genuinely good leaders can still nowadays
be tantamount to the achievement of a remarkable, virtually impossible feat. The
debate amongst business leaders, HR and management practitioners and academics
about the root and source of leadership is therefore still rife. The reason why
the debate has more recently focused on trying to determine whether leadership
is an inborn quality or whether it can actually be learned is arguably due to
the circumstance that this quality is sorely rare to find in nature and the
results yielded by learning programmes are not totally persuasive. Yet, many of
the most much-admired cases of leadership at global level refer to individuals who
have certainly never attended training programmes.

The subject has
attracted a constantly growing interest; insofar as the Kenexa Research
Institute (KRI) has recently carried out a worldwide survey in order to better investigate
the subject.

The study, entitled Exploring Leadership and
Managerial Effectiveness, involved 29,000 employees across 21 countries and
identified ten drivers of effective leadership. These drivers were identified
on the basis of the qualities any give follower was expected to find and
appreciate the most in a leader.

Global LEI Driver,

1. Elicit trust on the organization
leadership,

2. Consider quality and
improvement as top priorities,

3. Foster an open two-way
communication,

4. Serves the interests
of multiple stakeholders,

5. Recognizes employees providing
outstanding customer service,

6. Take action on new
ideas,

7. Motivates employees to
work hard,

8. Has confidence in the organization
future,

9. Recognizes productive
employees,

10. Evaluates performance
fairly.

As part of the
research, the KRI created and applied a Leadership Effectiveness Index (LEI),
which is comprised of five items:

Vision: Associated with senior management capability to give
employees a clear picture of the direction the company is headed;

Ability: Intended as senior management ability to deal
with the challenges faced by the business and its employees;

People: Intended as the senior management capability to
let employees feel important to the success of the company;

Quality: Senior management is committed to providing high
quality products and services to external customers;

Confidence: Based on the employee confidence in their company
senior leaders.

Based on these indexes, China and India emerged
as the countries where the most effective leaders are geographically located globally.
The LEI score recorded by the UK, that is to say 47 percent, accounted for it
finishing up in the 17th position over the 21 countries surveyed, a
remarkable 25 points behind India, which achieved the score of 72 percent (the
global average score was 55 percent).

The study also
investigated leadership effectiveness with regard to the different industries,
revealing that high-tech manufacturing is the industry which can counts on the
most effective leaders; it is followed by banking and financial services, retail,
heavy/light manufacturing, healthcare services and government.

In the UK, rather
in line with the global results, the most effective leaders are found in the
manufacturing, healthcare and retail sectors; by contrast, the government and the
financial services appear to be the sectors having the less effective leaders.

The
KRI also identified five effective leadership macro drivers, based on the
survey responses, describing the most inspiring behaviours expected by employees
in order to consider their manager’s leadership style effective.

Leadership effectiveness Macro Drivers

Employees describe
effective leaders as:

1. Inspiring trust and
confidence,

2. Valuing quality and
customer service,

3. Open and
communicative,

4. Holding a
multi-stakeholder perspective,

5. Holding managers accountable
to be good managers.

Another interesting part of the study concerns
the identification of the Leadership Effectiveness Priorities, which could be
considered as somewhat of a framework which takes into account “vulnerability”
and “strength” on the one hand and the “less important” and “more important”
factors on the other hand.

Table 1

Kenexa also developed
the Managerial Effectiveness Index (MEI) which is comprised of five items:

– Performance: Overall, I feel that my
manager does a good job.

– Work Management: My manager does a good
job “managing the work”: makes appropriate work assignments, setts priorities,
schedules, etc.

– Inspiration: My manager is an
outstanding leader.

– Trust: My manager keeps his/her commitments.

– People Management: My manager does a
good job in terms of “people management.”

Also in the
case of the MEI were identified ten drivers and six global Managerial
Effectiveness Macro Drivers.

MEI drivers

1. Employees are treated
fairly,

2. Performance is evaluated
objectively,

3. Communication is open
and two-way,

4. Employee ideas are
endorsed,

5. Problems are addressed
quickly,

6. Concern is shown for
employee well-being,

7. Employees behave
consistently with the organizational values,

8. Manager invests in
employee development,

9. Recognition is
provided,

10. Employees achieve their
career goals.

Global Managerial Effectiveness Macro Drivers

Employees
describe effective managers as:

– Fair,

– Communicative
and involving,

– Problem
solvers,

– Providing recognition,

– Employee-oriented,

– Supporting
growth and development.

The Managerial Effectiveness Priorities identified
by the study are shown in table 2:

Table 2

The findings of
the investigation also revealed that the two key priorities for the development
of a leader are the need to build trust and the need to be able and willing to
engage in an open and honest two-way communication with individuals.

As claimed by
the KRI Executive Director, Jack Wiley, some actions and behaviours, such as
working ethically and with integrity, are particularly relevant for developing
and eliciting leadership trust. “Direct reports need to feel safe enough to
tell their leader the truth” so that the types of behaviour such as remaining
approachable, being capable to listen and communicate openly are not just desirable,
but essential requirements for a genuine leader and a good manager.

It can be maintained that, as suggested by Jack
Wiley (2010), “any organisation can ultimately expand its pool of potential
leaders by focusing on improving the skills of its managers. Managers should be
encouraged to show empathy and to care about the careers of those in their team
and their overall well-being.”

The KRI research also
showed that leadership effectiveness is positively and significantly related to
some important financial performance metrics for organisations such as Diluted
Earnings per Share (DEPS) and Total Shareholder Return (TSR). Good and effective
leadership also has a positive and substantial impact on employee engagement
and on organisational creativity and innovation. “When employees rate their
leaders as effective, our study shows that their employee engagement index score
is 91 percent, whereas typically it is only 17 percent for employees who view
their leaders as neutral or ineffective. In other words, employee engagement
levels can be five times higher if your leaders are more effective” (Wiley,
2010).

The importance of
good leaders to modern organisations is unquestionable. In contrast, what is debatable
is that good and effective leaders could be made from scratch by means of
learning programmes. These activities, and coaching in particular, can definitely
help managers to understand the remarkable significance of other aspects of
their work and prompt these to focus on the paramount importance of these qualities
and behaviour. Notwithstanding, it is very unlikely that these programmes could
actually genuinely and drastically change the attitudes and behaviour that a
person has developed and consolidated throughout his/her life.

In order to
achieve this result a longer and more structured and carefully developed plan
of action would clearly be necessary. The Art of War is a book that all Chinese
students not only read but even study during their education path and, although
it is really unlikely that it could explain the good performance of Chinese
managers as emerged in the KRI investigation, it should not be neglected that
it is likely to make an impact in the personal and professional development of
Chinese people.

Leadership is most
likely an inborn quality, which in some cases spontaneously grows with the person,
whereas in some other cases, although inborn, it might not reveal to be so
naturally strong and needs hence to be nurtured throughout. In all of those
cases in which there are by no means inborn leadership qualities and traits within
an individual, the chances that this might develop effective leadership
abilities by exclusively resorting to learning programmes are indeed remote, if
any.